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BMO Financial Group

January 28, 2016 06:00 ET

BMO's Sixth Annual RRSP Study: Canadians Expected to Contribute Slightly More This Year

- Sixty-one per cent will be making a contribution before the February 29th deadline, down three per cent from last year

- For those who have already contributed, the average amount is $3,984 (up from $3,738 last year); for those planning to contribute, the average amount is $3,327 (up from $2,892)

- Knowledge gap: just 41 per cent are very familiar with the program

TORONTO, ONTARIO--(Marketwired - Jan. 28, 2016) - BMO Financial Group today announced the results of its sixth annual national Registered Retirement Savings Plan (RRSP) study.

This year's edition found that 61 per cent of Canadians who have not yet retired will be making a contribution to their RRSPs before the February 29th deadline, which is down slightly from 64 per cent from the same period last year.

Similarly, the amount that Canadians will contribute this year has only changed marginally compared to last year:

  • The average contribution amount for those who have already contributed came in at $3,984 (up slightly from $3,738 this time last year)
  • For those planning to contribute, the average amount is $3,327 (up slightly from $2,892 this time last year)
  • Last year, Canadians contributed an average of $3,737 to their RRSPs

"It's encouraging that the majority of Canadians continue to make RRSP contributions year over year - especially when many are juggling multiple financial priorities," said Robert Armstrong, Vice President, BMO Global Asset Management. "However, contributing is just the first step. It's also important to take into consideration how you manage that money once it's in your RRSP and to structure your retirement savings to ensure your investments are growing."

Mr. Armstrong added that, to help Canadians save for retirement and build their wealth, BMO Investments Inc. offers BMO SelectTrust™ Portfolios and BMO ETF Portfolios. The Portfolios are professionally managed and designed to fit different investment styles and risk levels, which allows clients to choose a portfolio that is best suited to their individual investment goals.

RRSP Confusion?

The study also found that, despite RRSPs having been around for almost 60 years, many Canadians lack understanding about a number of important specifics of the program. For example, just 41 per cent report being very knowledgeable about RRSPs. The study showed that the percentage of Canadians who described themselves as very knowledgeable about other elements of RRSPs was similarly low:

  • How to contribute to an RRSP (38 per cent)
  • When contributions must be made (38 per cent)
  • The amount one can contribute (31 per cent)
  • Investments that can be held within an RRSP (20 per cent)

"Contributing to an RRSP is one of the most effective ways to save for retirement, but it's clear there's a degree of uncertainty among many Canadians about several important elements of the program," noted Mr. Armstrong. "A financial professional can provide clarity into the aspects of RRSPs you want to understand better and ensure you feel confident you are making choices with your finances that will eventually benefit you in retirement. They can also work with you to develop a comprehensive financial plan that includes a retirement savings component."

Regional Breakdown

Region % who will be
contributing to their
RRSP before this
year's deadline
Average amount
Canadians have
already contributed
Average amount
Canadians plan
to contribute
% who consider
themselves very
knowledgeable about
what an RRSP is
National 61 $3,984 $3,327 41
Atlantic 49 $3,976 $1,687 34
Quebec 69 $3,943 $2,191 39
Ontario 58 $4,253 $4,024 43
Prairies 60 $4,149 $2,183 36
Alberta 62 $3,166 $3,926 41
B.C. 63 $3,911 $3,807 40

The BMO RRSP Survey was conducted by Pollara between December 30th 2015 and January 4th 2016, with an online sample of 2,177 adult Canadians. Data has been weighted using the latest census data to be representative in terms of age, gender and region. The margin of error for a probability sample size of 1,500 is ± 2.5% and for a sample size of 2,177 is ± 2.1%, 19 times out of 20.

For more information on saving for retirement, please visit www.bmo.com/retirement.

For more information on investing, please visit www.bmo.com/selecttrust.

Get the latest BMO press releases via Twitter by following @BMOmedia. Also, get additional timely updates, related articles and insights on Twitter, Facebook and Linkedin.

About BMO Financial Group

Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of approximately $642 billion as of October 31, 2015, and close to 47,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.

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